Institutional Change in Financial Systems

Abstract

This paper summarizes and evaluates changes in the financial systems of the advanced capitalist economies since the early 1980s. It does not focus directly on the development of international financial markets per se, though developments in this area are intricately linked with institutional change in domestic financial systems. The first section reviews alternative approaches to comparing financial systems and conceptualising their broader political-economic functions. The second section provides a brief empirical summary of key changes in financial systems, broadly captured by the concept of financialisation. The third section addresses debates on how to explain change in financial systems. The final section revisits the issue of financial system typologies, looks more closely at the changing function of financial systems vis-a-vis the real economy and the financial crisis of the late 2000s, and concludes with an agenda for future research in the field.